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Price volatility with Puerto Rico bonds

Q

What is your view on the likelihood of Puerto Rico defaulting on any of its bonds – general obligation, highway and electric, etc.?

R.Y., Connecticut

A

James A. Klotz responds:

We see no likelihood of imminent default by any Puerto Rico issuing entity. However, until there are clear signs of fiscal improvement, we expect heightened price volatility to persist due to Puerto Rico’s less-than-attractive financial condition and the headline hysteria effecting the trading of these securities.

Sep 9, 2013

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